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Us 15, U.s. 15, Europe 12, Bangladesh 12, New York 10, Christine 7, Angie 7, America 7, Charles Ramsey 6, Geico 3, Stephen 3, United States 3, Warfarin 3, Spain 2, Eastern Europe 2, Kenneth Cole 2, Peter 2, Portugal 2, Bob 2, Usa 2,
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  CNN    Your Money    News/Business. A break down the  
   financial news of the week. New.  

    May 12, 2013
    12:00 - 1:01pm PDT  

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"your money" starts right now. we live in one america with two economies. i'm christine romans. this is "your money" the stock market is hitting highs, corporate profits are soaring, but not everyone is feeling it. as the dow moves higher, america's middle class is stuck. you should be rolling in stock market riches, instead, many of you are missing out. only 52% of you are invested in stocks. that's down from 65% in 2007. meanwhile, corporate profits are soaring. up 94% as a share of the economy in the last decade, but wages are stagnant, and america's companies are so hungry for talent, they're importing it from abroad. meanwhile, you can't pay for the college degree you need just to compete. i want to bring in terry savage, steven moore, and terry prince. terry covers personal finance. stephen is an economic writer
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and commentator, and gnomy is a left leaning think tank and author of "it takes a village, anp epic tale of deceit." the stock market is disconnected. the s&p 500 is up 20% since the lows of 2009, and a new forecast guidance this week says it's not done yet. lazlo burinne who has been right and has a legendary status on wall street said the s & p could go to 1900 by the end of the year. that could be a gain of 17%, but half of americans aren't invested. what needs to change for more americans to get in? >> well, you know, let's not blame the stock market or complain about it. it feels better than in march of 2009 when the dow was 6700. the real thing that's going on is the fed has been extraordinarily successful at creating a lot of money. that helps the government
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refinance its deficit at very low interest rates, and since interest on the national debt is the third largest category of spending after defense and social spending, the government thinks it's great to have low interest rates, but the fed can't do everything, and we're seeing proof of that. there's a lot of money in the economy, and businesses are so worried about what will happen with business and insurance, and consumers are so worried about jobs, they're not buying houses with low mortgage rates, so the money has to go somewhere, and it's been going right into the stock market. that's why you see the markets soaring when the economy and jobs struggling to grow, but not keeping up with what is going on. the market is a function of a lot of money looking for a home, and the stock market is home. >> nomi, a rise used to mean a rise in the economy. the dow is at 15,000, but the economy is struggling to grow at barely 2.5%. why the disconnect? >> first of all, the money that goes into the stock market that terry was talking about is cheap
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money that is funneled in through institutions, through banks, through some of the korpshzs, through hedge funds, through mutual funds that can take money that's almost at zero per isn't interest rates and funnel it into a place where it can push the market up. but actual individuals don't have the luxury of additional income. in fact, incomes have declined relative to this rise in the stock market as we know. the percentage of u.s. gdp that personal wages make up are at all-time lows, so there's no available money for individuals to make ends meet in their homes, in their lives, let alone push into a stock market that is being bolstered by policies and cheap money. >> talking about cheap money, stephen moore, the fed pumping $85 million into the economy each month. that's driving the recovery in the market. we haven't seen the same recovery in jobs. won't this slow in jobs ultimately be bad news for housing and stocks? >> first of all, let's make the
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case when you have dow at 15,000, this is unqualified great news for the economy. now, the argument is made, well, only half of americans have money in the stock market, so only half of americans are benefitting. what i say about that, christine, which is really the crux of the issue, is what we need to do as we move forward in this 21st century, is become much more of an investor/owner society, so that every american can benefit from the wealth gains that are engendered by a rising stock market. what that means is we should have much more expanded 401(k) plans, make it easier if people to invest in the market as a way to get rich. i have talked for years on this show and others, why not finally allow young and lower-income americans to take some of their social security money and put it in a personal aeblth where they can actually invest in the market? those kind of things would actually reduce the income
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inequality in the country we're all worried about. >> it's something the bush administration touted for a long time, then the market fell apart and people said isn't it a good thing you don't have a lot of people with money in the stock market? >> you can't have it both ways. you can't say if the market goes up -- >> i know. >> look, over the long run, this is an important point, christine. over the long run, especially for young people. where do you want to put your money? in the stock market because the long-term return is 8%. >> if you want a good job in this country, you need a good degree. the u.s. work force has shifted over the last ten years. the share of workers with a college degree exceed the workers with a high school degree or less, but student loan debt is on the rise. two thirds of college graduates graduate with debt. people entering the work force are getting a double whammy, stagnant wages and crushing debt. i'm worried that instead of people managing money going forward and planning for retirement, they're going to be
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managing dent and not getting that first step into the -- you know, into the work place. how serious is this? >> it's very serious. the student loan situation as we know is diabolical. as you mentioned in terms of statistics, people can't even find jobs to pay off their debt right now. and it's only going to increase and get worse in the future. you go back to a situation where even people who can save have accounts in banks at zero percent interest. there's nothing to accumulate. everyone is talking about maybe we could get into the stock market and have that as a way to increase people's disposable income, but if you have no income to begin with and all of your income is going to debt when you receive it, there's nothing left over to save, let alone to risk which you should not do in a market environment. you risk money you have, not money you don't have. when you're saddled with debt, it's a very precarious situation, not only for students but the overall situation of the
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economy. >> it's companies that are going to drive the job market because they have to create the jobs, yet they're barely hiring, sitting on huge amounts of cash. so if you need the income, you need the job, how do we get companies or what makes companies start adding more workers? >> well, right now, because they're able to get money cheaply and invest and worry about short-term quarterly earning reports and what wall street feels about them and how they can effectively increase their share holdership in their own companies and push their stock up, that's where their money is going. there's cash on the sidelines and cash into their stock. there's no need to put cash into other jobs because they're getting the returns in a sort of artificial push that's being aided by low interest rates and cheap money, and they don't have an incentive to therefore increase their growth strategies and increase the amount of jobs that people could have. right now, there are three people looking for every one job. that is historically cloe. it's a bad scenario.
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>> i know, the worst of the recession, it was 7 looking for a available job. the good news it's not as bad as it used to be, but the bad news is you have to beat out two people to get that job. stephen, consumer spending is what drives the remember. new research from mint.com, money management software, shows spending is on the rise. american households now spend around 9% more than they did in 2009, stephen. two major segments of america, the young and the old, are being pinched. yet consumers are spending more. can that last? >> well, you know, i'm going to correct you on something, christine. >> you do it. >> i have always believed that it's a myth -- >> then i'll correct you back. >> you can do that. i believe it's a fairy tale that what drives the economy in the long-term is consumer spending. no, i don't believe that -- it's true in the short-term, christine. you know, when consumers go out to the shopping center and spend money, that increases business. but in the long-term, what increases the economy is when
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businesses invest, and this is exactly what you guys were talking about. >> i'm going to agree with you because i get crazy when people keep talking about, consumer spendic consumer spending, and i say that's what got us in the mess in the first place. >> okay, so here's the problem with u.s. economy. first of all, i have no disagreement that this is a terrible economy for low-income people. it's amazing, the very people who are most likely to vote for barack obama who have been the people most victimized by those policies, but i will say if we want to see more growth in the economy, and by the way, higher wage jobs in the future that is directly related to business spending. the one think we're not seeing enough of right now in the u.s. economy is businesses investing in plant and equipment and computers, the things that lead to future growth. i think that's partly responsible -- if you want more investment, you don't raise taxes on investment, and the other thing, i say this almost
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week, i think obama care is having a very negative effect on the willingness of businesses to expand right now. >> i'm going to ask terry to weigh in with a final thought on that, too. you have talked about new regulations, talked about concerns about what taxerates are going to be. do you think the president's health care plan is holding back small businesses? >> i know it is for a fact. i salt in at a luncheon table and i heard people who i didn't know what business they were in talk about whether they could make some of their people part-time or hire additional people or go over the limit and the rising cost of health care. it's hurting the wrong people, seniors who save, the fed is pushing down rates now, retirees can't live on their income. it's insane that the government gets to borrow at a quarter of a percent thanks to the fed but that we make students pay 6.8% interest to repay their loans.
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and it's, as stephen said, it's insane that we penalize growth and capital investment and hiring of people. what we really want to do is encourage more hiring, more investment, and we have a lot of distortions in washington. both sides of the aisle need to understand this to move us forward. >> all right, terry, steef phes and nomi, come back. so many things to talk about. nice to see all of you this weekend. up next, new highs of the dow this week. how to make the most of this bull market right now. ♪ [ female announcer ] nothing gets you going quite like the power of quaker oats. today is going to be epic. quaker up. but i feel skinnier, you know? not really. aaah! jessica! whoa!
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if you're already in the market, is it time to cash out? if you're not, is it too late to get in? record highs for the stock market but investors are weary. >> investors are, yes, excited they're making money and really anxious. they understand that this has an element of artificiality. >> if that's what the pros are saying imagine how anxious individual retailers must feel about this rally and what about the almost half of all americans who are just too scared to invest in stocks? americans have few other choices out there to help build wealth and save for retirement. in today's low interest rate environment the return on bonds and interest-bearing accounts are negligible. >> a lot of individual investors still on the sidelines. they have been waiting to get in. what are you waiting for? we're hitting all time highs. get in the market. >> they're afraid they have seen a bull market more than four years old and don't want to be the sucker at the end.
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>> they afraid at the bottom. they're afraid at the top. you have to get in now. >> get in how? one answer, look for value in companies that may be lagging behind in the recent bull market run. >> the way we have seen some of the industrial names lag really to me is a buying opportunity. i think we will have economic growth and these more sensitive companies have plenty of opportunities to get stronger and the stocks to move higher. >> price to earnings ratios, the the company's stock price compared with its projected profits. a standard measure investors use to project stock prices. at an average of 19 times earnings, today's stocks look cheaper than past rallies, back when ratios reached into the 20s and 30s during the tech bubble of the 1990s. that suggests today's rally has room to grow. stocks have already gained 15% this year alone and it is only may. shouldn't you cash in now while you're ahead? >> it is perfectly good to be happy and take a little profit off the table and keep the positions and the commitment.
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up next, austerity backlash. is europe headed for a depression? we'll take a look. and later, the bank heist that used key strokes instead of guns. we're going to tell you how a $45 million ring was busted. see life in the best light.
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immunization and maternity care. and we've received numerous high ratings for our excellent standard of care. we're focusing on the big things so you can enjoy the little things. kaiser permanente. thrive. economic crisis in europe. the worst we have seen since the 1930s, when america faced its own depression. and what european leaders do in the coming months could determine whether the continate recovers or falls apart. the private sector economy in europe has been shrinking for 15 consecutive months, officially putting the continent in recession territory. unemployment rates are hitting record highs in the eurozone, breaking through 12% in march. 12% unemployment. it's even worse of some of the member countries. 27% in greece and spain.
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17.7% in portugal. to put that in perspective, u.s. unemployment peaked at 10% during the height of its financial crisis. and youth unemployment in europe is drastically higher. 60% in youth unemployment, spain as well, 42% in portugal. leaders there have real cause for concern as younger people grow older without the job skills they need to support themselves and grow the economy. it's going to put a strain on europe's economy and their deficits. the deficits and austerity measures put in place to deal with their dent are a source of major controversy there. as the debate rages on, leaders are watching in the u.s. closely. former president bill clinton said there's a right way and a wrong way to do austerity. >> if you don't kick a long-term deficit reduction plan in at the right time and we don't pass a plan in advance, then there's always the chance that the
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economy will start recovering and interest rates will go through the roof and it will make the susequester look like a sunday afternoon walk in the park. >> so here's the question, will too much government belt tightening threaten the fragile u.s. recovery? and what can the u.s. learn from europe and its crisis? peter is an economist and professor at the university of maryland school of business. richard quest is the host of quest means business on cnn international. thank you for joining me. peter, let me start with you. you say it's too late. austerity measures in europe have failed. the whole of europe is headed for a depression. why? >> simply, no capacity in southern europe for a recovery, and the dedefinition of a depression is a permanent recession. that will superintend north because the north is dependent on the north to exports its products and we're starting to see unemployment grow in france
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and pressure on german companies. >> tell me, peter, is what is happening in europe instructive for the u.s. as it comes to belt tightening. >> absolutely. you have to have structural reforms before it's too late. we need to get our social security under control. our rising health care costs. much higher than in europe, under control. but more importantly, what caused them to borrow so much is huge trade deficits. you have to pay for those by borrowing. we need to export more, become more competitive in the global economy so we can pay for the things we buy. it we don't do that, all the money we're borrowing from the rest of the world and to finance our government will ein the end put us in this kind of crisis in the next decade. >> let me bring in richard quest from london, looking at the u.s. from london. what advise would you offer our leaders? >> the austerity debate which is raging at the moment and which peter articulates so well, really comes down to how much
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and how fast and how long. of course, you have the northern countries led by germany, and who even today, they are still suggesting that fiscal consolidation is the way forward. but the problem here is that trying to do two things at the same time. they are trying to repair the existing house whilst at the same time, build a new one. and they're doing rather well on the second part. they've got all sorts of new plans for compacts, six-pack plans, a banken union, all sorts of things that will pay dividends in the future, but they're still saddled with a euro which is dysfunctional, an austerity which is to extreme, and an ability to get growth moving on the southern part of the continent. now that is the lesson that comes from europe. everybody can't head for the exit at the same time. and in the united states, of
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course, they welcome that moment when the deficit and the structural imbalances have to be dealt with. but that time, as peter would probably -- he might agree, he might agree, that time probably isn't just right now. >> so i'll ask you, do you agree, peter? >> we certainly are rocking along right now, growing at about 2.5%, although there's a lot of danger signs out there. we have very high underemployment among recent high school and college graduates. we're not facing the kind of crisis right now, our nose is not to the window, but we have the warning signs, and we're doing the very same things the italians and the spaniards did ten years ago. they didn't react appropriately, and now they're paying the piper. sooner or later, that will catch up with us, even though we print the world's money, at some point, the world will say, no, we don't take your money anymore. someone else will do the printing for us. >> richard, last word. >> i think -- yeah, in a strictly academic sense, peter
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is right. but he conveniently overlooks certainly flexibility issues of the u.s. economy. and the mobility of labor. a single market that works much better, a single digital market which the europeans don't have. so perhaps in a theoret kk sense, but we're a long way from the apocalypse in the u.s. you have certainly seen in europe. they're not out of this by any means. >> richard quest, and peter, so nice to see both of you this weekend. we'll talk again soon. up next, a fire at a clothing factory in bangladesh this week. this after that deadly factory collapse just two weeks ago. but do tragic events like this change the way we shop? as part of a heart healthy diet. that's true. ...but you still have to go to the gym. ♪ the one and only, cheerios
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after fire broke out inany 11-story sweater factory. this just two weeks after a massive garment building collapsed in that nation. rescuers just miraculously pulled a survivor out of the rubble after 17 days, but the death toll from that tragedy keeps rising. now at more than 1,000. images of the dead, this one, have been heart breaking. wondering what this has to do with jow? what it has to do with your money? capitalism, allow me to introduce you to your conscience. what's your connection to how this was drilled? where this was grown? or to the people who made these? heartbreak and devastation in bangladesh reminding american consumers of the link between the hangers in their closet and the rubble a world away. 98% of clothes bought in the u.s. are made abroad. in the 1960s, 90% of what we ware was made here. a sench ray after the shirt factory fire killed 146
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immigrant germs in new york, american closets are stocked with clothes made by young women working in similar conditions around the world. more than three quarters of americans said they would rather buy a product made in the usa, most say they would pay more, but wages are stagnant, costs are rising, middle class buyer power isn't what it used to be. who paid the price for cheap? who pays the price and who is at fault? the factories in the collapse at some point had made items for the children's place, dressbarn, benetton, and joe fresh among others. those companies trying to do damage control. the children's place said, quote, this was a terrible tragedy and our thoughts and sympathy continue to go out to those impacted. we believe in important systemic reform is needed and we're actively evaluating a number of alternati alternatives to support that goal. the company of joe fresh started a relief fund for the victims'
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families. gale is the deputy director of the council on foreign relations women and foreign policy program, and rota is a reporter for the new york times. what responsibility do these companies have, how far does it reach to their suppliers, to their suppliers' suppliers? all the way for the factory to the hanger, companies and consumers tend to disconnect from where these things come from? >> you have a situation where fast fashion could lead to quick deaths. that's a question for all of us to wrestle with. there has been this race to the bargt basement in terms of where things are made. as you know, christine, it is a high-volume, low-margin business with almost no margin for error for factory owners. one day late, 5% discount has to be given to the company. a week late, the company has a right to cancel the order. so i think all of us have to ask when we look at our clausts,
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where did this come from, who made is, what are they earning and what pressures do they face? >> consumers say, look, they don't want their dollar to be responsible for someone's death half a world away. check out a couple posts on joe fresh's facebook page. shame on you, so many deaths to make products for you. shame. and then this one, low, low wages and no unions. this is why gaurments are made n bangladesh. time for us to all show some humanity. people can say they're upset, but they chase cheap. the middle class continues to chase cheap. you know, the whole point of fast fashion is it's easy and it's cheap. if clothing prices rise, will the outrage fade? >> well, yes, i think to some extent it will. people do care about, you know, working conditions in developing countries. and i think that people really do honestly think that they would be willing to pay a higher price, and while this is very saliant in their mind, they
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might do it for a little while. we have other examples, fair trade coffee. people will pay for some sense of justice, for the sense of living in a moral world and being good people in it. but there are many other considerations, and people's budgets are perhaps the most important one. and so i think that these other kind of like more ethereal considerations will fade over time. >> edwardo, do companies have a responsibility to make sure they're not doing business with shady operators, with people who are just throwing thousands of workers into a building with cracks and no exits? look, this happened in the united states more than 100 years ago, and it changed the way we manufacture here, and now in our closets are the very things, the very things being made under the same conditions that we would never allow here. >> i would agree with you, that there is some possibility for this. however, the track record of the movement to press multinational
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corporations to insure that their suppliers around the world, you know, actually pay living wages and improve their working conditions, is not very good. and also, one other thing one must consider is that, you know, if we demand that wages and working conditions in a place like bangladesh are the same as they are in the united states, that would probably lead to enormous unemployment in bangladesh. we have to understand, kind of like the other consequences of what this pressure can do. >> sure, i mean, nobody wants to deny somebody -- and look, this people say this is not a time for big companies to be pulling out of these companies because they squeeze the good profits and now there's trouble, they can't run away from a product they helped create. disney halted production before this because of a fire last year. other companies could follow. it would be worse for bangladesh? the garment industry is about 77% garment exports.
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it has provided socially acceptable work for women. a majority muslim country. you don't want the countries pulling out, but you want them requiring higher standards. >> that's right, and i think it is really important to remember that almost 85% of the 3 million or 4 million workers in bangladesh working in this segment are women. women who have limited mobility otherwise, limited education otherwise, and often limit ed work opportunities otherwise. this has an opportunity to empower women and have money to change the dynamic within their household. i think the answer isn't to leave. the answer is to do better while you're there. that is up to all of us because every single one of us as consumers, we vote with our wallets. one thing they respond to is pressure from consumers. when consumers want to see something, companies respond. that's what fashion is all about. it really is up to all of us to
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say this matters. some studies have shown that even for less than a dollar additional pergarment, you could make a huge difference. >> i worry that the companies know that consumers always chase cheap in the end. and have a short memory, they really do. gale, thank you so much, edwardo, thank you. we'll keep talking about what the companies are doing to raise the standards. we're not alone talking about this, from the rubble in beg ludesh to the hanger in your closet, what responsibility do you have when you shop for clothes, and is made in america the answer? are you still sleeping? just wanted to check and make sure that we were on schedule.
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disaster half a world away
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in bwenge ludash has many americans questions where and how the clothes they wear every day are made. business correspondent zain asher went down to new york's garment district in search of cloelthing made in the usa. she joins me now. >> there's still7100 people working in the garment district here in new york city, but american clothing factories are not as common as they once were. wages in places like bangladesh are around 30 cents an hour and production is a lot faster with some sweat shots producing workers to produce a sweater every six minutes. outsourcing is clearly here to stay. the question is how can we prevent another dewrazarser fro happening again. tan yeah has been a garmin worker for about 30 years. this donna karan dress will retail for about $15,000. his salary is about $125 a day, a far cry from his counterparts in bangladesh where garment workers are paid less than 2% of
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the amount. >> that's a high labor order. >> he says the work of his supervisors produces three dresses a day, but production rates in places like this are much higher. in a world where china wages are roughly $1 an hour manufacturers are pressured to turn out products at low cost, sometimes at the cost of safety. but this man says cheap labor doesn't necessarily mean lower prices for americans. >> something they miss is they're more expensive. >> but there's another problem. >> the companies will not give the american people the names and addresses of the factories they use. why not? what is the big secret? >> brands of retailers need to take responsibility for the actions that they are involved in. >> some companies are trying to do just that. for example, gap inc. which outsources to 20 countries
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launched a program to improve fire safety at its factories in bangladesh, and children's place which manufactured garments at the factory that collapses said they will like lly make changes. other companies have promised to be more aggressive in monitoring working conditions where their products are made. the american apparel and foot ware association says less than 3% of our clothes are made in the u.s., so what can consumers do? >> a boycott isn't of any help. it will only punish the workers who are already next to starvation. they need these jobs. if we paid a dollar more for, you know, a good t-shirt, that you could use for years, i mean, would that kill us? would that destroy our economy? >> and clearly, a complete boycott of clothing made in places like china or bangladesh is unrealistic, but something we can do is demand to know more
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about where our clothes come from and the conditions in which they're made. nike, the gap, and even apple have all come under fire for how their suppliers treat workers and they have all implemented changes. i think transparency is really key. >> yeah, absolutely. and you know what, so many people say, what can i do? can i not spend my money? it's not up to you. it's up to the companies. the corporate responsibility, it's conscious capitalism, up to the companies. thanks so much. up next, charles ramsey became an internet sensation after he played a key role in the rescue of three missing ohio wom women. why what he was eating for dinner played a role next.
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you've been watching the heart-wrenching story in cleveland unfold all week. three missing women found alive after a decade of captivity. when the nation is hooked on a story, corporate america is never far behind. this is charles ramsey. he's a neighbor who helped rescue the women and in interviews after the incident,
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even in the 911 call to police, he was eating before running outside to help. >> here i come with my half eating big mac, and i look and say what's up? and she's like, i've been trapped in here. he won't let me out, me and my baby. i said, you don't have to talk anymore. come on. >> a big mac, he also mentioned mcdonald's several other times the company sent out this tweet saying it would be in touch with charles ramsey. some call it news jacking. some say it's pr genius, and others think it's harmful to a brand's credibility. it's when companies break into a news story for public image, to boost sales, or just to acknowledge it's their name and product that has been mentioned. we spoke with mcdonald's it's waiting to contact mr. ramsey out of lespect for the victims and their families. they received thousands of tweets following his comments
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and the company felt had it to respond, but it strongly insists it's not taking advantage of the situation. still, some pr experts have their doubts. rachel is a media writer and founder of change the ratio. in the days following the girls' escape and charles ramsey's rise to internet fame, his criminal record them came to light, specifically jail time he served for domestic violence. he pleaded guilty, spend eight years in prison, has cleaned up his act, but regardless of his history, he has saved eight women. >> mcdonald's isn't actually attaching itself to charles ramsey as a spokesperson for mcdonald's. it was responding to the mentioning of mcdonald's over and over again in the story. it was a part of the story, not a big, pivotal role, but mentioned enough that i think it would have been odd for mcdonald's not to acknowledge it. it would be appropriate for
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mcdonald's to do something charitable, to do something nice for charles ramsey, nice for the neighborhood, and probably appropriate for mcdonald's to take the lead and demonstrate corporate responsibility by donating a big chunk of >> that was in the >> i find it so interesting, big companies trying to figure out how to use social media because usually social media is about dising companies, not about letting them get their -- you know, get their own message or
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pitch into the mainstream conversation. >> it's all about social platforms and very smart, canny advertisers able to be nimble and react in real time, can use the platforms to get their message across. oreo is a fantastic example. so nim bm, so quick, and won the super bowl with that tweet, with the dunk in the dark photo. poland spring, you know, they would have been ridiculously dumb not to capitalize on that. they probably could have been, you know, more clever about their tag line, but sometimes you just have to do what you can do in the moment. >> and sometimes you do something and it's not what you should do. i mean, let's talk about that kenneth cole tweet in the political uprising in egypt. it read millions are in uproar in cairo, rumor is they heard our new spring collection is now available online. they got slammed and later issued an apology. what can companies learn from mistakes like this? >> i think that just learn not to be tacky.
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i think this is a judgment thing. have smart experienced people with proven judgment who are manning the hair trigger of social media. the worst is if you have an inexperienced intern or a junior person who thinks that it's their job to be, you know, funny or snarky, and then, you know, tweets something out that crosses the line of respectability and good judgment. i think to always react with on the side of decency and respect and compassion for victims or for oppressed people. this sounds really basic, but it's amazing how kenneth cole just totally missed it. a luxury goods dealer, you know, surfing on the back of the arab spring uprising. it didn't loo good. terrible judgment. >> they are still waiting and all of the companies still wading into the social media space, trying to figure out how to use it. it has always been they would pay for what they want to say
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about their company, and this social media is the conversation. it's a main street conversation, word of mouth, not paid advertising, so they're having a hard time, a slow, tentative hard time figuring it out. nice to see you today. >> likewise. >> up next, a brazen bank heist busted in new york. how thieves stole $45 million from thousands of atms within hours. next. what if this feeling could last all week? with centurylink as your trusted partner, it can. our visionary cloud infrastructure and global broadband network free you to focus on what matters. with custom communications solutions and dedicated support, your business can shine all week long.
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tens of millions of dollars looted from banks around the world. mary snow joins us with that story. this wag a mag massive and complex operation. law enforcement in more than a dozen countries worked together to unravel the electronic trail that led to arrests in new york. a bank heist using key strokes instead of guns. thieves stealing $45 million from banks and financial institutions. u.s. attorney loretta lynch calls it the largest known theft of its kind, moving literally at the speed of the internet. the organization made its way from the computer systems of international corporations to the streets of new york, as well as major cities around the worl world. lynch announces chanks against
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eight men in new york in a ring allegedly involving hundreds of people and two attacks using prepaid debit cards linked to accounts thousands of miles away. thieves had raised withdrawal limits. >> a card has literally $20,000 on it or $2 million on it. >> reporter: the prosecutor describes -- hackers first targeted a credit card processor in the unite ash emirates in december. then a second and larger attack in february in oman. pin numbers were stolen sent to teams including one in new york. those teams would then head to atms with plastic cards, even hotel key card with the stolen information. authorities say here in new york, eight men were able to withdraw 2.4 million dollars within a ten-hour period. some 3,000 atm withdrawals were made that day as part of the heist with these gift cards.
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prosecutors recovered cash and rolex watches. cashers are given 20% of the money and the rest is sent to the ringleaders. what's unclear in this case is who those leaders are, specifically the hackers. sean henry, a former executive assistant director of the fbi says they typically come from one area. >> my time in the fbi many of these cases emanated out of eastern europe -- out of russia, ukraine, romania, throughout eastern europe. though they're now starting to spread into other areas like asia and latin america. >> catching the hackers is a constant cat and mouse game law enforcement plays. seven suspects in new york pled not guilty to the charges against them. the eighth suspect considered the ringleader was found murdered in the dominican republic in april. the prosecutor's office would not confirm reports that he was found with $100,000 in cash. christine? >> mary snow, what a story.
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thanks. thanks for joining us for this conversation today. find me on faceboo facebook @christineromancecnn. have a good weekend. we begin with breaking news out of new orleans. cnn affiliate wdsu is reporting 10 to 12 people have been shot at the intersection of frenchman and north viler were streets. we understand an informal mother's day parade was going on. people who were injured were taken to the hospital for treatment. as soon as we get more on this we'll update you with our information. also ahead from the "newsroom" db wro "newsroom," the broerts thers o kidnapping

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